Cities offering themselves as sites for foreign manufacturing companies to make and sell into their national market can be found all over the world today.
A hundred years ago only one city was systematically doing this in Europe. But far from being a road to prosperity, that city was not one of the few that can claim to have avoided the depression of the interwar years.
And if that city, and it was a British city, saw questionable benefit; it cannot be said that the national economy benefited either. Quite the contrary.
A century of experience
In 1914 the biggest automobile producer in Europe was one of the US giants, and it had been based in this English city since 1911. And although it was used as a base for exporting into Europe, such production would hamper emerging British automotive producers more than it would hamper Citroen in France or Opel in Germany.
The City in question here was certainly not Birmingham. The political and business leadership of this city would never have gone seeking foreign inward investment. Their answer to the American and German industries taking their customers was to seek to foster the British Empire as a preserve for British exporters. This was what lay behind the Tariff Reform campaign loudly launched by Joe Chamberlain in 1903. This protectionism became known as the ‘Birmingham economics’ as it came to be the official policy of the Conservative and Unionist parties.
The Birmingham label would have been prompted by memories of the Victorian Prime Minister Disraeli. He had led the resistance to the huge urban movement to scrap customs duties designed to protect British agriculture. To Disraeli, Manchester was the main base for this free trade philosophy which he called ‘Manchester economics’.
As Chamberlain’s scheme became central to the national debate it got dubbed the Birmingham economics. It seemed the opposite to Manchester… And Manchester between 1905 and 1914 seemed to be the base for the key opponents of Chamberlain’s ideas.
Manchester, it was also, who had offered themselves as a base for Ford Motors of Detroit in England and its markets.
Having built a ship canal all the way from Liverpool to Manchester was the basis of this offer. And then an industrial estate was built on the edge of the conurbation by the people who built the canal. This brought in mainly US companies. This estate has since been called Trafford Park. And it was all done in the decade before Chamberlain’s protectionism debate.
Westinghouse, the US electrical giant, as well as Esso were there before Ford. More details of these companies can be found here.
By 1910 the opposition to Chamberlain was mainly voiced by the Liberal Party for whom the Manchester Guardian was the regimental bugler. The Manchester Liberals brought their resistance to the Chamberlain agenda to a crescendo during December 1909 as part of the election campaign over Lloyd-George’s ‘People’s Budget’.
The Liberal establishment rallied at Manchester’s town hall (Free Trade Hall), and the key note speech was carried almost verbatim by the Guardian, whose editor sat along side the cabinet minister who was making the key note speech.
‘ Why, what is the Manchester Ship Canal ? It is a channel to enable foreign goods to be imported cheaply into this country; – ( Hear. hear ) It is a tube to bring dumping into the very heart of our national life. And you have built it: you have built this canal yourselves; you have built it at great cost; you have dragged the Trojan horse within your own walls yourselves – (cheers). But more; you have grown fat in the process of committing this extraordinary folly.’
Whether the cheering audience were aware that the minister had substantial shareholdings in the US railways that brought US goods to their embarkation, we do not know. But they might have had some idea. It was well known that the speaker’s mother was daughter of a Wall St speculator.
Our cabinet minister had already represented two seats in what is now Greater Manchester. The very first of which was Oldham, as those who have seen Richard Attenborough’s film of his early life may recall.
But by 1909 he had lost both these seats and sat for Dundee. But ‘Manchesterism’ had no more ferocious champion, so he still had centre stage at Free Trade Hall that December. Later his son Randolph would sit for neighbouring Preston and our speaker’s grandson also called Winston would be both MP for Stretford until 1997 and on the board of the Trafford Park company itself – part of which lay in his constituency.
Downfall of Birmingham
Had a few things not gone so well for Hitler at the start of 1940, it was never inevitable that Chamberlain would have been ousted from leadership of the UK.
Then the Birmingham model of economic development would not have been so systematically forgotten as Churchill becomes a national icon.
We have already done an outline of how the business forces behind Chamberlain and Baldwin in the 1920s and 1930s pursued regional and national priorities. But much of this is totally forgotten today, even in Birmingham. Hence it could be thought that there had never been any alternative to looking to foreign and US investors for the country’s future.
But there was. Manchester was never convinced by Churchill and the liberals. Manchester voted Churchill out, and Chamberlain supporters could win in Manchester. But Manchester economics never had any traction in Birmingham. Churchill was actually President of the Board of Trade when he was finally voted out in Manchester.
A model for economic development ?
By the 1920s Manchester was an economically distressed area. Ford moved out in 1931. Birmingham’s home-grown automotive companies were only just beginning to become significant both in Birmingham and the national economy. At the beginning of the current century it is hard to say Manchester was fat for long. In popular culture, Manchester is known for foreign-owned football, but otherwise Coronation St and Shameless.
However, the West Midlands is now being pressed to re-style itself as a Greater Birmingham in the quest for profile with overseas capital. But unless one is so close up to it that one cannot see the wood for the trees, can anyone really see that many lessons for Birmingham coming out of Greater Manchester?
Fifty years ago no one would think to find much that Birmingham could learn from Manchester in terms of economic development. That they might now think they can, may well be because Birmingham now has no more idea of how to give a lead to the business sectors of provincial England than Manchester ever did.